THE PESO weakened slightly against the dollar on Thursday due to higher global oil prices.
The local unit closed at P58.61 per dollar on Thursday, inching down by 3.5 centavos from its P58.575 finish on Wednesday, Bankers Association of the Philippines data showed.
The peso opened Thursday’s session stronger at P58.45 against the dollar. Its intraday best was at P58.41, while its worst showing was its closing level of P58.61 versus the greenback.
Dollars traded inched up to $1.38 billion on Thursday from $1.37 billion on Wednesday.
The rise in global oil prices dragged down the peso, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“The peso weakened, tracking the renewed spike in global crude oil prices after the fresh sanctions on Russian gas exports,” a trader likewise said in an e-mail.
Oil prices rose more than 2% on Wednesday, supported by a large draw in US crude stockpiles and potential supply disruptions caused by new US sanctions on Russia, while a Gaza ceasefire deal limited gains, Reuters reported.
Brent crude futures settled $2.11 or 2.64% higher at $82.03 a barrel, the highest since August 2024. US West Texas Intermediate crude (WTI) settled up $2.54 or 3.28% at $80.04 a barrel, the highest since July.
In post settlement trade, Brent rose to the highest since July and WTI gained more than $3 a barrel.
US crude oil inventories fell last week to their lowest since 2022, the US Energy Information Administration reported, as exports rose and imports fell.
The latest round of US sanctions on Russian oil could disrupt Russian oil supply and distribution significantly, the International Energy Agency said in its monthly oil market report.
For Friday, the trader said the peso could rise anew as softer-than-expected US core consumer inflation data fueled bets of further Federal Reserve rate cuts.
The trader sees the peso moving between P58.45 and P58.70 per dollar on Friday, while Mr. Ricafort expects it to range from P58.45 to P58.65.
Overnight, data showed the consumer price index (CPI) rose in line with expectations at an annual rate of 2.9% in December, from November’s 2.7%. But core inflation, which excludes food and energy prices, rose by 3.2%, below forecasts for 3.3%.
Investors were particularly encouraged by the latest inflation reading since data released on Tuesday showed that US producer prices increased moderately in December.
The inflation report led traders to price close-to-even odds the Fed would cut interest rates twice by the end of this year. — Aaron Michael C. Sy with Reuters
